Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

UN treaty on business and human rights vital for economic and social justice

Sharan Burrow 28th October 2019

How can transnational corporations be held to account in a world of nation states? A binding UN treaty would be an important step.

UN treaty
Sharan Burrow

The global economic model has failed working people. The power and greed of huge corporations have captured governments, which are acting against the rights and interests of their own workers.

The current model of trade—the bulk of it tied to global supply chains, in highly-competitive, low-cost markets—means that jobs created by transnational companies are too often based on exploitation without decent working standards. Ninety-four per cent of the global workforce of the top 50 corporations is hidden in supply chains, where the obscurity of business contracts facilitates this exploitation and too often a dehumanising oppression—even inclusive of modern slavery, along with low wages, short-term or precarious contracts and unsafe work environments.

In addition, new frontiers have emerged with the monopoly dominance of giant technology companies—with the power they exercise by controlling data—and platforms, whose business models have little or no connection to national laws, taxation systems or employment responsibility.

Decent work

Transnational business cannot and will not be sustainable unless it is based on the principles of decent work. Yet international law is not well equipped to address cross-border corporate abuses of human and labour rights. The traditional approach of obliging states to hold solely to account perpetrators of abuses within their own borders no longer corresponds to the realities of a global economy.

Companies are operating as vast de facto networks of nominally national-level entities, each protected by the corporate veil shielding them from being held accountable. Even when it comes to the subsidiaries of transnational companies, which are either directly or indirectly controlled by their parents, there is often no avenue for access to justice. When it comes to seeking remedies locally, workers continue to face enormous legal and practical barriers—not least because local companies are often deliberately under-capitalised, essentially making them judgment-proof.

Practically speaking, most workers are deprived of access to their rights as a result of the impunity of transnational companies, sustained by the absence of a legal framework that captures all business operations and activities. The 2019 ITUC Global Rights Index found workers had no or restricted access to justice in 72 per cent of countries.



Don't miss out on cutting-edge thinking.


Join tens of thousands of informed readers and stay ahead with our insightful content. It's free.



Binding instrument

A legally-binding global instrument on business and human rights could help close accountability gaps and combat corporate impunity.  

What would a meaningful United Nations treaty have to include to achieve this? It would entail:

  • a broad substantive scope covering all internationally recognised human rights, including fundamental workers’ and trade-union rights, as defined by relevant international labour standards;
  • coverage of all business enterprises, regardless of size, sector, operational context, ownership and structure;
  • extraterritorial regulation of parent companies and access to justice for victims of transnational human-rights violations in the corporation’s home state;
  • regulatory measures that require businesses to adopt and apply human-rights due-diligence policies and procedures.
  • reaffirmation of the applicability of human-rights obligations to the operations of companies, and
  • a strong international monitoring and enforcement mechanism.

What are the chances of getting there?

In June 2014, the UN Human Rights Council (HRC) adopted Resolution 26/9, establishing an Intergovernmental Working Group (IGWG) tasked with the elaboration of an international legally-binding instrument to regulate, in international human-rights law, the activities of transnational corporations and other business enterprises.

Despite the enormous deficits in respect for human and labour rights across global supply chains, this decision was by no means a given. Following heated debates, reflecting divisions based on ideology and economic power between the global north and south, the HRC recorded a vote of 20 to 14, with 13 abstentions, paving the way to address one of the most significant shortcomings in international human rights law. 

The United States—unsurprisingly, given its sceptical attitude towards the HRC as a whole—has entirely rejected the process and has not engaged in any of the negotiations, limiting itself to sending a letter to state its opposition. The business lobby, led by the International Chamber of Commerce and the International Organisation of Employers, also did their best to frustrate the process.

Visible shift

There has however been a visible shift in government attitudes towards regulating companies and in support for a legally-binding treaty.

This month, the IGWG held its fifth session, to enter into substantive negotiations on a revised draft text published in July. Governments, for the first time from both industrialised and developing countries, actively participated in the negotiations, congratulating the chair of the IGWG on improving a previous draft. Indeed, the vast majority of governments expressed their commitment to constructively engage to achieve the IGWG’s objective.

The most significant shift came from the European Union. In 2015, during the first session of the IGWG, the EU representative left the negotiating room, having offered polarising remarks opposing the treaty process during the discussion of the programme of work. At the outset of this month’s negotiations, however, the EU explicitly acknowledged the urgent need to strengthen prevention and mitigation of adverse human-rights impacts related to business activities and to provide access to effective remediation. While the bloc still points to the absence of a negotiating mandate from the European Council, and the need for further analysis and clarification of the text, all involved actors are now aware we are on a trajectory towards binding legislation.

Several factors have contributed to the change of tune. The revised draft text has taken on board various concerns and priorities expressed by industrialised countries and the business community. Notably, the text has been further aligned with the UN Guiding Principles on Business and Human Rights, alleviating the fear that a binding treaty could undermine the implementation of the latter. Moreover, the scope of the companies covered has been clarified and broadened to be comprehensive.

At the same time, the two key tenets of effective respect for human and labour rights—due diligence (prevention) and access to remedy—feature prominently in the text. In short, the chair of the IGWG has made a clear attempt at a compromise.

Moreover, discussions at the international level have fuelled progress on longstanding campaigns at the national level. Mandatory human-rights due-diligence legislation, a key component of the legally-binding treaty,  is now on the legislative agenda in many countries, in some instances with company support. The European Commission itself is now exploring regulatory options to require businesses to undertake due diligence for human rights and environmental impacts in their own operations and their supply chains.

Urgently needed

It is now critical to build on this momentum. There is scope to improve the text of the draft further, for example when it comes to the international enforcement mechanisms and issues of trade and investment. Written comments on the revised draft can be submitted by February 2020 and, based on these inputs, a new draft is expected to be published next June. But it is time for all parties to be pragmatic, to delay no longer this urgently-needed treaty.

Most importantly, governments must firmly express their political commitment, to make a legally-binding treaty a reality—part of the foundation for a new global social contract, with the rule of law at its centre. The value of an EU directive on due diligence and remedy cannot be overestimated.

For unions and civil society, it is critical to lobby all governments, and the European Commission, and to include wherever possible that voice of business committed to change. The global negotiations are a critical focus but all governments need to take their seat at the table—with the demands of their publics providing the momentum to see the treaty agreed.

Sharan Burrow
Sharan Burrow

Sharan Burrow is general secretary of the International Trade Union Confederation.

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

u421983467 9c73 b24a0b674750 1 The West’s Defence Now Depends on Trump’s Mood SwingsStefan Stern
u4219834674735ecb6fd43 0 The Dark Side Of The Boom In Last-Mile LogisticsSilvia Borelli
u421983467e464b43d2 1 Why European Security and Sovereignty Depend on Its Digital SectorMariana Mazzucato
u42198346c3fba71fa474 0 As Temperatures Rise, European Workers Face a Looming ThreatMarouane Laabbas-el-Guennouni
u42198346741 4727 89fd 94e15c3ad1d4 3 Europe Must Prepare for Security Without AmericaAlmut Möller

Most Popular Articles

u4219834647f 0894ae7ca865 3 Europe’s Businesses Face a Quiet Takeover as US Investors CapitaliseTej Gonza and Timothée Duverger
u4219834674930082ba55 0 Portugal’s Political Earthquake: Centrist Grip Crumbles, Right AscendsEmanuel Ferreira
u421983467e58be8 81f2 4326 80f2 d452cfe9031e 1 “The Universities Are the Enemy”: Why Europe Must Act NowBartosz Rydliński
u42198346761805ea24 2 Trump’s ‘Golden Era’ Fades as European Allies Face Harsh New RealityFerenc Németh and Peter Kreko
startupsgovernment e1744799195663 Governments Are Not StartupsMariana Mazzucato
u421986cbef 2549 4e0c b6c4 b5bb01362b52 0 American SuicideJoschka Fischer
u42198346769d6584 1580 41fe 8c7d 3b9398aa5ec5 1 Why Trump Keeps Winning: The Truth No One AdmitsBo Rothstein
u421983467 a350a084 b098 4970 9834 739dc11b73a5 1 America Is About to Become the Next BrexitJ Bradford DeLong
u4219834676ba1b3a2 b4e1 4c79 960b 6770c60533fa 1 The End of the ‘West’ and Europe’s FutureGuillaume Duval
u421983462e c2ec 4dd2 90a4 b9cfb6856465 1 The Transatlantic Alliance Is Dying—What Comes Next for Europe?Frank Hoffer

Eurofound advertisement

Ageing workforce
The evolution of working conditions in Europe

This episode of Eurofound Talks examines the evolving landscape of European working conditions, situated at the nexus of profound technological transformation.

Mary McCaughey speaks with Barbara Gerstenberger, Eurofound's Head of Unit for Working Life, who leverages insights from the 35-year history of the European Working Conditions Survey (EWCS).

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Foundation for European Progressive Studies Advertisement

Spring Issues

The Spring issue of The Progressive Post is out!


Since President Trump’s inauguration, the US – hitherto the cornerstone of Western security – is destabilising the world order it helped to build. The US security umbrella is apparently closing on Europe, Ukraine finds itself less and less protected, and the traditional defender of free trade is now shutting the door to foreign goods, sending stock markets on a rollercoaster. How will the European Union respond to this dramatic landscape change? .


Among this issue’s highlights, we discuss European defence strategies, assess how the US president's recent announcements will impact international trade and explore the risks  and opportunities that algorithms pose for workers.


READ THE MAGAZINE

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

S&D Group in the European Parliament advertisement

Cohesion Policy

S&D Position Paper on Cohesion Policy post-2027: a resilient future for European territorial equity

Cohesion Policy aims to promote harmonious development and reduce economic, social and territorial disparities between the regions of the Union, and the backwardness of the least favoured regions with a particular focus on rural areas, areas affected by industrial transition and regions suffering from severe and permanent natural or demographic handicaps, such as outermost regions, regions with very low population density, islands, cross-border and mountain regions.

READ THE FULL POSITION PAPER HERE

ETUI advertisement

HESA Magazine Cover

With a comprehensive set of relevant indicators, presented in 85 graphs and tables, the 2025 Benchmarking Working Europe report examines how EU policies can reconcile economic, social and environmental goals to ensure long-term competitiveness. Considered a key reference, this publication is an invaluable resource for supporting European social dialogue.

DOWNLOAD HERE

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641